Jay Walker Sues Nearly Every Successful Internet Company, Claiming They're All Built Off His Patents

from the exhibit-number-one-in-why-business-method-patents-are-lame dept

Last fall, we noted that Priceline founder Jay Walker had apparently gone full on patent troll, with a series of lawsuits against Facebook (for "friending" -- violating patent #5,884,272) and the Powerball Lottery (for having lottery "multipliers" in violation of patent #7,740,537).

Of course, Walker has a very long history of being more interested in patents and locking up ideas than actually engaging in innovation. Yes, he actually did some innovating with Priceline, but all the way back in 1999 he was talking about how excited he was about the ability to patent business methods, which had really only recently been thought of as patentable. He certainly took to it quickly, patenting all sorts of business ideas.

Apparently those lawsuits last year were just the warm up act. Joe Mullin alerts us to the news that Walker has teamed up with the rather infamous patent troll Erich Spangenberg, whose motto is sue first, ask questions later in order to sue over 100 different companies for violating various patents he holds. Among the companies sued are Microsoft, eBay, Amazon, Facebook (again!), WalMart, Groupon, Apple, Sony and Google.

"A number of great companies can trace their genesis to technology that was first developed at Walker Digital in the mid-to-late 1990s. We are proud of our inventions and the number of innovative businesses and activities founded on these inventions. These businesses have not only changed the way people around the world live, work, travel and interact socially and commercially, but also have given rise to numerous American jobs."

The press release also plays up the claim that they prefer not to sue (uh... yeah...) and that they would have liked it better if these companies had just agreed to give them money in the first place. That's pretty amusing coming from a company that has teamed up with Spangenberg who has flat out said he prefers to sue first. If you don't want to sue, you don't work with someone like Spangenberg.

Mullin has a summary of a few of the new lawsuits:

A lawsuit [PDF] against Citigroup, Discover, Wells Fargo, and two payment-services companies, T-Chek Systems and Orbiscom, saying the companies infringe two patents on a "Method And Device For Generating A Single-Use Financial Account Number."

A lawsuit [PDF] against daily deal sites, including Groupon, Livingsocial (and parent company Amazon), and smaller sites like BuyWithMe, Tippr.com, jasmere.com, and juiceinthecity.com. Those sites are alleged to infringe four Walker patents, including one issued in 2001 called "Systems and Methods Wherein A Buyer Purchases A Product At A First Price And Acquires The Product From A Merchant That Offers The Product For Sale At A Second Price." For example, the lawsuit says BuyWithMe is in trouble because it "offers buyers products and services from retailers at discounted prices and arranges for users to take possession of the goods or services at the retailers' locations." Hmm… that was invented in 2001.

A lawsuit [PDF] against online game operators, including—(deep breath)--Activision, Atari, Cartoon Interactive Group, Disney Interactive, Electronic Arts, ESPN Internet Ventures, Microsoft, Miniclip America, MLB Advanced Media, Onlive, Popcap Games, Sony Corp., Turbine, Turner Digital Basketball Services, Valve Corp., Walt Disney, Yahoo, and Zynga. The companies are accused of violating two patents, including this one, which "allows video and computer game enthusiasts to submit their game outcomes to a central online repository so that they can be compared to the results of other players."

Isn't the patent system great? It allows people to take general ideas that lots of people have, give you a monopoly on them for doing nothing... and then sue all the companies who were successful actually implementing them... all the while letting you suggest that those companies unfairly "took" your idea.

I Can Feel It Working

Solution:

So, we fire up the time machine and remove this guy "Jay Walker" (how obvious can your fake name be? I wonder what his real name is....) from history and compare the results of that alternate time-line with the present.

Et viola~! Empirical evidence as to whether or not his "intellectual" contributions are the basis of the present state of the worlds' innovation.

Obviously patent application need to have an example of the patentable device supplied for examination. There should also be an annual storage fee for the sample device for each year that the company wishes to maintain patent protection. If you can't embody it in a device it isn't patentable. This means you can only patent the execution of an idea, not software or a business method, or an idea that might be possible once technology advances.

Jay Walker?

More the merrier

Hmmm... seems like enough defendants to turn around and form a class! I'll leave it to you (white-hat) attorneys to choose the best charge, since it doesn't look like "idiocy" or even "avarice" are grounds for suit.

More the merrier

Hmmm... seems like enough defendants to turn around and form a class! I'll leave it to you (white-hat) attorneys to choose the best charge, since it doesn't look like "idiocy" or even "avarice" are grounds for suit.

Response to: Anonymous Coward on Apr 14th, 2011 @ 2:24pm

I've made the very same point here on Techdirt on past posts covering the quality of patents. The Patent Office wod better serve the interest of inventors and the public by reinstating the requirement of providing a working model of the 'invention'. Reading through the claims for business process and software patents you can spot that most are vapor ware. I doubt anyone 'learned in the arts' could recreate these inventions based on the patent submission. That alone should be a red flag that the application is overly broad.

Re:

This used to be true for the most part, but the government was paying for the storage. Then they came up with this great idea: ditch the physical item, so they can ditch the storage! The patent examiners can be trusted not to patent frivolous "inventions"!

valve?

I know for absolute certainty that there was prior art for the gaming one, as TFC and Counterstrike (valve-based mods) used online ladders that while not associated officially with the games, were used to track progress exactly like Xbox Live and PSN do now.

Compensation for actual damages, or merely extortion payments?

These patent troll cases sound a lot like extortion schemes, which would put them under the definition of racketeering. And since when is an "idea" patentable - it used to require a specific embodiment as an application of that idea, and then the patent would only protect that specific embodiment - what is this "broad coverage" thing all about? Sounds like the kind of "deregulation" that got Wall Street into trouble. As usual, it is the lawyers that stand to make a killing off this corruption of the patent system.

The last 50 years would like a word with Mr. Walker

"allows video and computer game enthusiasts to submit their game outcomes to a central online repository so that they can be compared to the results of other players."

This is either:
A. A high score table, which pre-dates the modern internet, and really, computer gaming itself. Plenty of bowling alleys or golf courses post a best scores of the week page.
B. A rank score based on relative performance... usually the ELO system, which was invented for Chess. It was adopted by many video games, because the system really isn't at all chess-specific, and thus works in pretty much any competitive game.
or
C. A database of records and scores, which works... well, like a database of pretty much anything.

So he's claiming a patent on (depending on which company he's suing this week), sticking scores to a bulletin board, a 50+ year old Chess ranking system, or a publicly accessible database.

I'd say I'm amazed such a patent was ever granted, but I'd be lying, as sadly, this is par for the course in the US now. Maybe "par for the course" is a bad choice of words... pretty sure this patent covers that in golf games too.

Oh my, I hope that guy stays within the USA because he could, after reading all the above patents, sue myself and others worldwide for doing exactly the same things as nearly all of his patents before he even thought or patented any of them.

Oh noes. the horror

Most of these are not just prior art, but obviousness.

The only one I have not used, created, programmed, or have first hand knowledge of BEFORE any of these patents were granted [and I am talking like up to 10 yrs before] is the first one about single use financial account numbers, though I seem to recall a fair few older OS400/VMS systems within the banking community that used to do exactly that sort of thing.

Oh wait that's right I forgot, according to all patent trolls, before the internet there was nothingness *eye roll* and the nothingness was filled by them with stolen ideas and obviousness.. Praise be!

A defendant's standpoint

I work for one of these companies. I cannot even begin to describe how disgusting this guy is.

His claims that he approached us to avoid a law suit are completely false. Walker Digital is completely unresponsive to any communication we have attempted. Even if we wanted to "play ball" and "license" his ideas, we cannot.

IP rights

If an inventor cannot sue for patent infringement and recover damages, they why should anyone invent anything? Only vigorous patent enforcement rewards inventors for their inventions and incentivizes others to invent.

Re: IP rights

If an inventor cannot sue for patent infringement and recover damages, they why should anyone invent anything? Only vigorous patent enforcement rewards inventors for their inventions and incentivizes others to invent

Totally false. (1) Inventors get rewarded by successfully selling products on the market. (2) Multiple studies have shown that the main reason people invent is to solve a problem they have, not because of a patent.

I know you spam our comments all the time in order to push your own business, but can you at least try to be marginally factual?

truth about trolls

"patent troll"

Call it what you will...patent hoarder, patent troll, non-practicing entity, etc. It all means one thing: “we’re using your invention and we’re not going to pay”. This is just dissembling by large infringers to kill any inventor support system. It is purely about legalizing theft.

Prior to eBay v Mercexchange, small entities had a viable chance at commercializing their inventions. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now some of those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don’t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back in the patent system with injunctions fully enforceable on all infringers by all inventors, large and small.

Jay Walker

First, yes, his name is really Jay Walker. Do your research people.
Secondly, patents can be issued based on ideas without a physical product. Many large companies do not do the patent research because they figure it they get caught, they'll just pay off the patent owner because they are making so much money off their product anyway.
Thirdly, kudos to Jay Walker, who is an innovative thinker, came up with ideas way before their time, and was granted patents for his ideas.
I don't think he is a sham. How do you skeptics explain how he was able to come up with these ideas YEARS before the products/marketing techniques were put in place?

It's not so easy

Patent can't be given on general ideas because of the legal requirement that there is enough specs there so that "man. Skilled in the art" is able to build the system from the specs.
It also requires that there was no prior art implementing/describing the idea and it is not trivial.
All these barriers make enforcement of patent difficult enough.